Lawndale to Mull How to Spend Its Riches : Government: The city has half a million--and it’s growing fast--that it acquired from selling its interest in the Galleria at South Bay. On Jan. 3, a panel will discuss which capital improvements it should finance.

Christmas will be past by more than a week when the city of Lawndale begins to put together its wish list.

As more money accumulates each month, 33 residents and city officials will meet Jan. 3 to discuss what to buy with earnings from $10 million the city got when it sold its interest in the Galleria at South Bay.

The advisory committee, chosen by the City Council, has met three times in the last three months to discuss policies and organizational matters, but the Jan. 3 meeting will be the first time its members actually will suggest preferences for capital improvement projects in the city. The council will make the final determination on how the money will be spent.

Jan Rush, the city’s accounting manager and committee member representing the City Hall staff, said the $10 million is producing about $50,000 a month in interest. The city now has about $500,000 that it can spend toward community development and capital improvement projects, she said.

Among the proposals of committee members are more parks, a youth center, landscaping for the medians along Hawthorne Boulevard and improvements to the city’s sewer system.

The $10 million was the result of an investment in 1984, when Lawndale obtained an $8-million federal Urban Development Grant and loaned it to the Galleria developer, South Bay Associates, a division of Cleveland-based Forest City Enterprises.

The Galleria is just south of Lawndale in Redondo Beach, but that affluent beach city was ineligible for the economic development grant that was used to help rehabilitate and expand the $70-million mall.

In March, the City Council sold its interest in the mall to South Bay Associates for $10 million, and in April decided to put the principal in long-term, low-risk investments.

Under a formula approved by the council, at least a third of the earnings from 71.6% of the principal will be reinvested, so the principal will continue to grow. The remaining two-thirds from that portion of the principal would be spent on community development projects, such as the purchase of open space and the redevelopment of blighted areas.

Interest income from the smaller portion of the principal (28.4%) may be spent in any way the council sees fit.

Lawndale Elementary School District Supt. James L. Waters, who chairs the advisory committee, said each member will be asked Jan. 3 to make one suggestion on how the money can be spent.

The committee will study each suggestion, and later list priorities for the council to consider. Waters is not sure how many meetings it will take to put together such a list and said the group--with representatives from schools, churches, residents, businesses and government--has been given no deadline.

“I think people in general are pleased that there is a source of funds,” he said.

Waters said he would like to see some of the money pay for a park at Billy Mitchell Elementary School. The park could be used by the school during the day and open to the public at other times.

Mayor Sarann Kruse, who is not on the committee but who created the idea for it, said she would like to see money spent on repaving the streets and improving the sewer system, as well as landscaping medians along Hawthorne Boulevard and developing more parks.

“Most certainly the boulevard needs to be spruced up,” she said.

Nancy Marthens, a committee member representing residents, said agreeing on priorities may be a difficult task for such a large and diverse group.

Ironically, Marthens had been critical of the city’s investing the federal grant in the shopping mall, saying the money was intended to be spent for urban redevelopment projects. She asked the district attorney’s office last year to investigate the city’s use of the federal grant. The matter is still pending, a spokesman for the district attorney’s office said.

Her complaint aside, Marthens said she will suggest that some of the earnings be spent to build more parks. She also agrees with Kruse that sewers and roads need upgrading.

The question of spending for sewers has caused debate.

City and county officials who oversee Lawndale’s sewer system said they have seen no evidence that the city’s sewer system is overburdened. However, Marthens points to a 1976 study done for the city, which indicated that the sewer system was rapidly reaching capacity and would need upgrading if density continued to increase.

Public Works Director Jim Sanders said the city’s sewers have eight-inch lines and far exceed current demand.

Brian Scanlon, a supervising civil engineer with the Los Angeles County Department of Public Works--which maintains the city’s sewer system--said: “I’m not aware of any problems in Lawndale.”

City Manager Jim Arnold said the county will complete another study this fall that will re-examine the sewer system.

Jonathan Stein, a developer and representative from the business community, said the city’s first priority should be to landscape the median along Hawthorne Boulevard.

Stein said more fire hydrants should be installed in the southeast section of the city. He said developers did not put in enough hydrants as they built up that part of the city.

Although Stein--like all the committee members--asked to be appointed to the advisory committee, he said he thinks the “group is far too large to make effective decisions.”

He suggested that a much smaller group would work more efficiently.

“All I want to see the capital improvements group do is to act,” he said.

Stein said he believes the complaints about sewer capacity are an “anti-development bugaboo” intended to frighten residents into believing that the city’s infrastructure cannot accommodate more building.

Asked how he thought the money should be spent, former City Councilman Jim Ramsey joked: “How about buying a new City Council?”

Ramsey, who spent 12 years on the council before losing a bid for reelection in 1986, said some money should be spent to build a youth center so that youngsters have some place to go after school and during the summer.

Ramsey said he believes a youth center can help keep teen-agers from joining gangs.

“I think they should put it back into the people,” he said.